The "Add" button adds a page to the "Build a Report" function to gather pages across our site and email them to a preferred email address. Access your pages by clicking on "Build a Report." The "Remove" button removes a page from the "Build a Report" function. Access your pages by clicking on "Build a Report."

The "Build a Report" function allows you to add links to selected pages and send them in an email to your preferred email address. Use the Add button to the left to add a page to your Report. Use the Remove button to remove a page. Click on the "Build a Report" link to open your collection of pages.

Publications Search

Stricter Penalties for Breaching Regulations on Use of Foreign Currency in Vietnam

18 November 2011

Mayer Brown JSM Legal Update

Background

On 20 October 2011, the Government of Vietnam issued Decree 95/2011/ND-CP ("Decree 95") providing stricter penalties for violation of the laws relating to the use of foreign currency within Vietnam. The general rule on the use of foreign currency is set out in the Ordinance on Foreign Exchange Control dated 13 December 2005, and Decree 160/2006/ND-CP dated 28 December 2006, and provides that all transactions, payments, listings and advertisements by residents and non-residents in Vietnam must be in Vietnamese dong, except in certain specified cases.

Recently, the Government has taken measures to ensure compliance with the general rule, including the State Bank ordering an intensification of the inspection of contracts to check for violations of price listings.

Decree 95

The latest such measure is Decree 95 which amends and supplements a number of provisions of Decree 202/2004/ND-CP dated 10 December 2004 relating to the penalisation of administrative violations in the monetary and banking sectors which applies to infringements of foreign exchange control and gold trading regulations. Under Decree 95 the levels of fines applicable for certain infringements are increased substantially, notably the fine for the unlawful listing of prices or services in a foreign currency is increased to VND 300-500 million. The full range of penalties are set out below.

Penalties

A fine of VND 50-100 million, up from VND 5-12 million, will be imposed for:

remitting or carrying foreign currency into or out of Vietnam contrary to law;

making payment to foreigners for goods and services in foreign currency contrary to law;

buying, selling or making payment in foreign currency contrary to law;

making payment for goods or services by using gold contrary to law;

conducting business in gold or buying or selling gold contrary to law (added by Decree 95).

A fine of VND 300-500 million, up from VND 45-70 million, will be imposed for:

engaging in foreign exchange activities without a license or after the license has expired or is suspended;

providing foreign currency remittance services without a license;

exporting or importing foreign currency and gold without a license from the State Bank of Vietnam ("SBV");

listing prices, or advertising goods or services or land use rights in foreign currency or gold contrary to law. (Decree 95 supplemented this provision by adding reference to 'advertising' and 'land use rights'. The previous fine for listing in foreign currency was VND 5-12 million).

Additionally, where foreign currency or gold is used unlawfully for buying, selling or making payment, that foreign currency or gold may be confiscated.

Authority to impose penalties

The head of the Banking Supervisory Agency of the SBV may impose a fine of up to VND 500 million dong.

The head of the Banking Supervisory Agency of a provincial SBV branch may impose a fine of up to VND 30 million.

An SBV inspector may impose a fine of up to VND 500,000.

Effective Date of Decree 95

20 October 2011

Comment

Decree 95 is the latest example of the Government's determination to ensure compliance with foreign exchange control regulations and, notwithstanding concerns an investor may have about currency fluctuation risks, illustrates the importance of ensuring the listing of prices in contracts is in compliance with Vietnamese law.

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the “Mayer Brown Practices”). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe-Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown Mexico, S.C., a sociedad civil formed under the laws of the State of Durango, Mexico; Mayer Brown JSM, a Hong Kong partnership and its associated legal practices in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. Mayer Brown Consulting (Singapore) Pte. Ltd and its subsidiary, which are affiliated with Mayer Brown, provide customs and trade advisory and consultancy services, not legal services.

“Mayer Brown” and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

Attorney Advertising. Prior results do not guarantee a similar outcome.

The Build a Report feature requires the use of cookies to function properly. Cookies are small text files that are placed on your computer by websites that you visit. They are widely used in order to make websites work, or work more efficiently. If you do not accept cookies, this function will not work. For more information please see our Privacy Policy

You have no pages selected. Please select pages to email then resubmit.